Wells Fargo Named in Securities Suit After Failing to Disclose Alleged Wrongdoing

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Wells Fargo & Company and two of its top executives are facing a proposed class action lawsuit that claims the defendants failed to reveal to investors the extent of the bank’s illicit practices between January 13, 2017 and July 27, 2017. The suit notes that Wells Fargo admitted to harming its customers by opening thousands of fraudulent debit and credit accounts in their names. After this truth came to light, the bank allegedly assured the public that it was taking the steps necessary to change its practices and rebuild customers’ trust.

“Despite these assurances,” the case reads, “Wells Fargo had not disclosed the full extent of its illicit practices or the extent to which its misconduct had harmed unwitting customers. Indeed, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies.”

The suit argues that the defendants failed to reveal to investors and the public that Wells Fargo was responsible for charging over 800,000 customers for unnecessary car insurance, “the expense of which pushed approximately 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 vehicle repossessions.”

On July 27, 2017, The New York Times published an article revealing this alleged practice and claiming the bank owed “wronged customers” $73 million, causing stock prices to drop approximately 2.58 percent and damaging investors.